REVIEW OF JET A-1 PRICES IN THE MONTH OF JULY 2018

 

BACKGROUND

Malawi Energy Regulatory Authority (MERA) considered recent trends of the oil prices on the international market and changes in other macroeconomic fundamentals in the local market and their impact on Jet A-1 fuel prices.

 

 JET A-1 PRICES ON THE INTERNATIONAL MARKET

The average FOB price for Jet A-1 increased in June, 2018 when compared to the average FOB price obtained in the Month of June, 2017 on which ruling airfield prices are based. The FOB price of Jet A-1 increased by 52.88% from USD440.35 USD/MT to USD673.20 USD/MT.

 

 EXCHANGE RATE MOVEMENT

 The Malawi Kwacha has remained stable since the last price review in July 2017 trading at K733.95/USD.

 JET A-1 PRICES

The MERA Board considered the combined effect of the movement of the Jet A-1 FOB prices and exchange rate of the Malawi Kwacha to the US Dollar as well as changes in local factors that determine the Jet A-1 prices and noted that the landed cost increased by 32.19% and 33.05% at Kamuzu and Chileka International Airports, respectively. Under the Automatic Pricing Mechanism, Jet A-1 qualified for an upward price adjustment since the In Bond Landed Cost (IBLC) changes are beyond the ±5% band at both airports.

The Board, therefore, resolved to adjust upwards the airfield prices at both airports in order to allow recovery of the increasing landed cost. Jet A1 airfield prices have therefore been adjusted upwards as follows:

  

Airport

Current Maximum Airfield Price(Kwacha per Litre)

Recommended Maximum Airfield Price(Kwacha per Litre)

% Change

KIA

                                   737.67

                                                    829.85

 

12.49

CHILEKA

                                  687.08

                               

             780.92       

 

 

13.66

 

                  All operators are required to sell Jet A-1 at prices not exceeding these maximum approved Jet A-1 prices.

 

 SIGNED

                                            

Rt. Rev. Dr. J.P. Bvumbwe

 BOARD CHAIRPERSON

  MALAWI ENERGY REGULATORY AUTHORITY

16th July, 2018